BC Government Interventionism Increases Your Homeowner Grant

(January 11, 2017)

The bi polar metro Vancouver real estate market may be requiring medication soon. Once again government interventionism is rearing its ugly head. Remember when all levels of government, the media, NDP and special interest groups put a metaphorical gun to the provincial governments head last summer resulting in the fifteen perscent foreign ownership tax which began the spiralling down of the Metro Vancouver real estate market?

Now they are trying to play nice with more pressure, this time because home and property owners are incensed by their inaccurately high property value assessments driving their taxes into the Vancouver pot clouds.

Those who own homes with values that fall below $1.6 million are eligible for the annual homeowner’s grant, the provincial government announced January 10.

The government said it will raise the homeowner’s grant threshold from $1.2 million to $1.6 million, which is a response to owners worried about losing hundreds of dollars in grant money to offset property taxes.

Property assessments released earlier this month showed property value increases – from Squamish to Chilliwack -- ranging from 20%-50%, putting the value of many homes above last year’s $1.2 million threshold to qualify for a homeowner’s grant.

The move by government means that 91% of homes in British Columbia will qualify for a homeowner’s grant of up to $570, with that financial break reaching up to $770 for homes in northern and rural areas. About 83% of homes in Metro Vancouver fall below the $1.6 million threshold.

Finance Minister Michael de Jong said the 33% increase to the threshold is the government’s way of doing its part “to help keep housing costs affordable for families.”

The minister made a pointed remark that municipalities also have a part to play in addressing the province’s affordability crisis – a point made repeatedly by Premier Christy Clark, who has criticized some municipalities for the high cost of development fees, slow development permit approvals and the lack of housing supply. Fraser Valley cities offer far better service and value to developers and homeowners alike regardless of the type of home or development.

“Local governments can also work to keep property taxes at a manageable level for residents by controlling their spending and reigning in the amount of revenue they need to operate,” de Jong said.

Radical far left NDP MLA for Vancouver-Point Grey David Eby, his socialist/communist party’s housing critic, said he was startled the threshold was so low for so long, noting it was at $1.1 million in 2014, despite the skyrocketing price of real estate in the province.

“The only surprise to me was it took so long for the government to do this,” Eby stated. “But, clearly, when people started to receive their [property value] assessments, and started calling their MLAs during an election year, that wasn’t going to be feasible.”

The ruling Liberals are heading into an election campaign, where the province’s affordability crisis is expected to be one of the main issues on urban voters’ minds (put there for the most part by politcal opposition and anti development groups) as they head to the polls in May.

While Eby acknowledged a grant of $570 to offset property taxes on residential properties assessed at more than $1 million may seem like small change for some homeowners, the reality is that selling a property in Vancouver to buy another doesn’t get a person any further ahead. Or does it? We know for a fact that Eby is speaking truth to a lie for political reasons as there are dozens of jurisdictions that offer excellent homeowner value and lifestyle.

Many homeowners have also leveraged themselves to the point where the homeowner’s grant could be a breaking point, he said, adding that selling to rent is also problematic, with the rental vacancy rate at below one per cent. What he and no one else is mentioning is the spectacularly low interest rates we have and are enjoying. Our real estate team remember all too well the 19+% interest rates of the early and mid eighties!

“Sure, you can sell your house, but where are you going to go?” Eby said. “It’s a nice idea that maybe you could borrow against the value of your house, but every economist is saying that our housing market is due for a correction. So you could find yourself under water in a hurry.” Again - not true. We could teach our dog how to easily handle their finances and mortgage. Eby is simply pandering to millennials, urban voters who often couldn't qualify for a car loan let alone a mortgage. He would be far better off focussing on creating jobs through far less draconian regulations, lower taxes and a much improved attitude to industry and small business.

The provincial government is projected to spend $821 million on homeowner grants in 2017-2018, compared to $809 million in 2016-2017. The government reimburses municipalities for the full cost of the grants to ensure municipal revenues are not affected. The minister said the government is able to increase the threshold to $1.6 million because of the strength of B.C.’s economy.

Additional grants are available to homeowners who are 65 and older, or who qualify under the person with disabilities category, or who are a surviving spouse of a veteran who received certain war veteran allowances.

In some cases, the grants can reduce property taxes by up to $845, or $1,045, if the home is located in a northern or rural area. Low-income homeowners can also apply for supplements. Deferring property taxes via a low-interest loan program is another option for some homeowners, the government said.

So, there you have it folks, yet more drama and politics that are costing you the homeowner more and more. If you have any questions or are considering either the sale or purchase of your home or any real estate in the lower mainland or British Columbia don't hesitate to contact us anytime, 604-767-6736.

This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy - Listing data updated on June 6, 2020.